On July 20, 2007, the Centers for Medicare & Medicaid Services issued new reimbursement rules that limit the use and dosage for a class of anemia drugs known as erythropoiesis stimulating agents (ESA’s), in large part prompted by findings that the medications were being over-prescribed for profit under the current billing rules.

However, right about now, reimbursement rates are probably the least of the worries for the companies that market the drugs, Johnson & Johnson and Amgen. On May 10, 2007, Amgen received a subpoena from the New York attorney general seeking documents related to “promotional activities, sales and marketing activities, medical education, clinical studies, pricing and contracting, license and distribution agreements and corporate communications,” according to the firm’s May 22, 2007, SEC filing.

Also, a J&J spokeswomen said her company has also received a subpoena that covers the sales, marketing, medical education, and clinical trials of the ESA’s, according to the May 25, 2007, Cancer Letter.

The drugs are sold under the brand names Procrit, Epogen, and Aranesp, and Amgen manufactures all three, but Procrit is marketed by J&J.

On April 17, 2007, Newsday reported that the large for-profit dialysis chains like DaVita and Fresenius are negotiating volume discounts that allow them to buy ESA’s at a lower price than the reimbursement rate from Medicare, “making the drug a profit center.”

A June 2007 report on an investigation by the US Department of Health and Human Services Office of Inspector General found dialysis facilities could acquire the anemia drugs for as much as 10% below Medicare reimbursement levels. Acquisition costs varied substantially, the report notes, with chain-owned freestanding clinics often paying less than non-chain freestanding and hospital-based facilities, but all totaled, 99% of freestanding dialysis facilities could purchase ESA’s for less than the Medicare reimbursement rate.

On May 9, 2007, the New York Times reported that J&J and Amgen were paying “hundreds of millions of dollars to doctors every year in return for giving their patients anemia medicines.”

Federal law bars drug makers from paying doctors who prescribe drugs in pill form to be purchased at a pharmacy, but companies are allowed to offer rebates to doctors who buy drugs that are administered in their office.

Documents obtained by the Times show that, at just one practice in the Pacific Northwest, six cancer doctors received $2.7 million from Amgen for prescribing $9 million worth of its drugs last year.

Michael Sullivan, who worked as a business manager for the six doctors in the Pacific Northwest for 9 years, told the Times that the rebates inevitably encourage use of the drugs and that as result of the rebates from Amgen, the six doctors made about $1.8 million in net profit on the drugs they prescribed.

On May 10, 2007, the Wall Street Journal reported a review of documents provided by Dean McClellan, a former sales representative who filed a whistleblower lawsuit against J&J alleging that the company “offered excessive financial incentives for doctors” to prescribe Procrit and encouraged doctors to prescribe the drug at higher doses than were approved.

One document, cited by Journal, estimated that a doctor who purchased nearly $1 million worth of Procrit over 15 months would receive $237,885. Another program offered a discount for J&J’s product line for hospitals that used Procrit at least 75% of the time. J&J also developed a “Right of First Refusal” contract that required doctors to allow J&J to make a better offer if Amgen lowered the price of Aranesp, making it cheaper than Procrit.

Half of Amgen’s total revenue for 2006 was earned by Epogen and Aranesp, bringing in combined sales of $6.6 billion. Procrit was J&J’s second best selling drug last year at $3.2 billion, according to Forbes on March 21, 2007.

In the US, the majority of the profits are tax dollars, because Medicare pays for over 90% of services provided to patients with end stage renal disease (ESRD), and the anemia drugs cost approximately $2 billion a year, according to a report by the US House Ways and Means Committee which oversees spending by the Medicare and Medicaid programs.

The drugs are approved only for the limited use with patients who are anemic and undergoing dialysis due to chronic kidney disease, cancer patients who are receiving chemotherapy and patients who are scheduled to have major surgery to reduce the need for blood transfusions.

According to the FDA-approved labeling, before receiving ESA’s, patients should have a hemoglobin (red blood cell count) level of 10-12 grams per deciliter of blood, and the drugs are to be used only if the level drops below 10 grams.

Despite the FDA label, a 2006 report by the US Renal Data System, a large federally-funded registry of patients on dialysis, found that more than 40% of dialysis patients have a hemoglobin level greater than 12, and over 20% have hemoglobin levels above 13.

In the past year, investigations have shown that the drugs are being administered to patients who are not receiving dialysis or chemotherapy and in higher doses than approved. In fact, one study found that about 50% of dialysis patients had hemoglobin levels above what the FDA considers safe, and about 20% develop dangerously high levels that can lead to heart attacks and strokes, according to the November 17, 2006, medical journal Lancet.

A November 2006 Dialysis and Transplantation study found that the population with a red blood cell count above the guidelines also had higher costs of $3,100 per patient per year more for just the anemia drug.

Dr Laura Pizzi, a Research Associate Professor of Health Policy at Jefferson Medical College in Philadelphia who led the study, testified at a December 2, 2006 hearing before the House Ways and Means Committee and discussed how the study converted the difference in utilization to dollars amounts between actual usage versus recommended practice based on 2005 Medicare reimbursement rates and estimated that Medicare could have reduced the cost for the drugs by 36% if dialysis facilities adhered to the guidelines.

“If CMS spends $2 billion per year,” she said, “it is reasonable to say that several hundred million dollars could have been saved on the drug if providers followed the guidelines.”

On December 6, 2006, Dr Ajay Singh, clinical chief of the Renal Division and director of dialysis services at the Brigham and Women’s Hospital, testified at a hearing before the US House Ways and Means Committee and told lawmakers that patients in the higher hemoglobin group had a 34% higher risk of death and cardiovascular complications compared to patients in the lower level group.

He testified to a study that found there were 52 deaths in the higher group versus 36 in the lower hemoglobin group, or a 48% higher risk and a 41% higher risk of hospitalizations for heart failure and more cardiovascular adverse events.

Dr Singh also said the study found no benefits for patients who received the drugs and, therefore, “the conclusion was there was both increased risk and no substantive incremental quality of life benefit in raising the hemoglobin among patients with chronic kidney disease not on dialysis.”

An editorial in the April 18, 2007, Journal of the American Medical Association, by Dr Daniel Coyne, a professor at Washington University School of Medicine, estimated that it costs the Medicare program $1,700 more for each patients on the higher dose. “Physicians need to challenge industries,” he wrote, “that appear to be using patients as profit centers based on bad science.”

In February 2007, the FDA notified health care professionals of the results from a large clinical trial evaluating the use of Aranesp to treat cancer patients not receiving chemotherapy in which patients received either Aranesp according to the approved dosing regimen or a placebo.

Patients treated with Aranesp, the FDA reported, had a higher death rate and no reduction in the need for transfusions compared to those treated with placebo. The FDA warned that the finding showed that treating anemic cancer patients not on chemotherapy with an ESA may offer no benefit and may cause serious harm.

In a March 9, 2007, safety alert, the FDA reported that an analyses of four new studies in patients with cancer found a higher rate of serious and life-threatening side effects and/or death with the use of ESA’s. The studies were evaluating an unapproved dosing regimen, a patient population for which ESA’s are not approved, or a new unapproved ESA.

According to the FDA, as of March 2007, there were five clinical trials that demonstrated decreased survival time in cancer patients receiving ESA’s compared with those receiving blood transfusions.

In addition, the agency reported a higher rate of blood clots, strokes, heart failure, heart attacks and death in patients with chronic kidney failure when ESA’s were given to raise hemoglobin levels higher than 12.

The FDA advisory also noted that a higher risk of blood clots was reported in patients who were scheduled for major surgery and received ESA’s.

The FDA also warned of an increased rate of tumor growth in patients with advanced head and neck cancer receiving radiation therapy and metastatic breast cancer patients receiving chemotherapy, when ESA’s were given to maintain levels of more than 12.

There was also a higher rate of death reported, the agency said, but no fewer blood transfusions when ESA’s were given to patients who were not receiving chemotherapy.

In March 2007, the FDA revised the product labeling for the drugs to include updated warnings, a new boxed warning and modifications to the dosing instructions. The boxed warning advises doctors to use the lowest ESA dose to gradually increase the hemoglobin level to a concentration sufficient to avoid the need for blood transfusions.

The label revisions, the FDA said, were based on recently completed trials that described an increased risk of death, blood clots, strokes and heart attacks in patients with chronic kidney failure when ESA’s were given at doses that resulted in higher than recommended hemoglobin levels.

The revisions also addressed the trial findings for cancer patients, both when ESA’s were given at doses intended to result in higher than recommended hemoglobin levels, and when ESA’s were given to cancer patients whose anemia was not chemotherapy-related.

The revised label also summarizes the information from the trial that showed an increased risk for deep venous thrombosis in patients following orthopedic surgery when ESA’s were administered without the blood clot prevention measures listed on the product label.

On May 8, 2007, the FDA released a report by agency scientists that said there was no evidence to support that ESA’s improved the quality of life in patients or extended their survival, while several studies show the drugs can shorten lives when used at high doses.

On June 26, 2007, Robert Vito, Regional Inspector General for Evaluation and Inspections in Philadelphia at the US Department of Health and Human Services’ Office of Inspector General, testified at a hearing before the House Ways and Means Committee and described cases where dialysis centers have been found to be submitting false claims for payment to Medicare involving the anemia drugs.

This year, he said, Dialysis Clinic, Inc., which provides services to Medicare beneficiaries with ESRD with clinics located in more than 30 States, agreed to pay $1.8 million to resolve liability under the False Claim Act, with the majority of the settlement associated with the administration and billing of ESA’s when it was medically unnecessary.

According to US Renal Data System and the Medicare Payment Advisory Commission, Medicare spends about $64,000 annually for each person on hemodialysis for all medical services, and the anemia drugs Procrit, Epogen and Aranesp are the single largest drug expense for Medicare.

In 2005, Medicare spent $2 billion on the drugs, and from 1991 to 2004, the cost of the medications to Medicare increased 716% from $245 million to $2 billion, according to a report by the US House Ways and Means Committee.

Amgen produced the synthetic epoetin in 1989 and sold it under the brand name Epogen as a treatment for anemic kidney patients and HIV related anemia. Shortly after Epogen came on the market, Amgen entered into an agreement to allow J&J to sell the same drug under the brand name Procrit, as long as it stayed out of the dialysis market, which basically helped the young company raise capital.

In 1993, J&J received approval to sell Procrit as a treatment for cancer patients with chemotherapy-related anemia, and a few years later, Amgen gained FDA approval for the long-lasting version of the drug, Aranesp, to treat both renal and chemotherapy related anemia.

Recent investigations have shown the drug makers are providing incentives to encourage the over-prescribing of ESA’s to Medicare patients by charging less for the drugs than the Medicare reimbursement rates.

A March 2006 government report entitled “Medicare Reimbursement for New End Stage Renal Disease Drugs,” found freestanding dialysis facilities on average were able to acquire Aranesp for between 14 and 27% below the Medicare reimbursement amounts in 2005.

On May 10, 2007, due to reports of rampant over-prescribing of the drugs for uses and doses not approved by the FDA and the deaths and injuries to patients as a result, the Oncology Drug Advisory Panel (ODAC) voted 15-2 in favor of adding new restrictions on the use of the drugs and voted 17-0 in favor of requiring the drug makers to conduct new clinical trials.

However, experts say the recommendations come about ten years and probably tens of thousands of deaths and injuries too late, because the FDA was made aware of the serious health risks associated with ESA’s in a report on the Amgen sponsored Normal Hematocrit Study back in 1996, and the FDA did little more than revise the product labeling a wee bit.

The 1996 study was designed to evaluate whether patients with chronic renal failure undergoing dialysis had fewer cardiovascular complications if the ESA was administered to attain a higher hematocrit level as compared to a lower level. The trial was terminated early because of a finding of more deaths and non-fatal myocardial infarctions in the patients randomized to the higher hematocrit target level.

The labeling revision recommended that the ESA’s not be used to achieve hematocrit in excess of 36%, or a hemoglobin level of 12 g/dL and was accompanied by the sponsor’s agreement to conduct a study to further examine the risk for blood clots among patients receiving ESA’s because an increased thrombotic risk was suspected to be one of the causes for the risks detected in the study, according to the FDA.

So ten years later, two clinical trials and an editorial finally appeared in the New England Journal of Medicine in November 2006, to report the risks associated with the use of ESA’s in the treatment of anemia from chronic renal failure.

The Correction of Hemoglobin and Outcomes in Renal Insufficiency (CHOIR) study showed increases in serious and potentially life-threatening cardiovascular events when Procrit was administered to reach higher hemoglobin levels, and the Cardiovascular Risk Reduction by Early Treatment with Epoetin Beta (CREATE) study trended toward more cardiovascular events in a pattern similar to the CHOIR study, thus strengthening the findings of the CHOIR study, the FDA said.

On June 26, 2007, Dr John Jenkins, Director of the FDA’s Office of New Drugs Center for Drug Evaluation and Research, testified at a hearing before the House Ways and Means Committee and said the study findings “underscore the importance of the warnings previously described in the labeling for Procrit, Epogen, and Aranesp regarding cardiovascular risks that include thrombotic events and increased mortality in hemodialysis patients who participated in the Normal Hematocrit Study.”

He told the Committee that the new studies, combined with the findings from the Normal Hematocrit Study, showed that patients with anemia due to chronic renal failure, whether or not receiving dialysis, “were at increased risk for serious cardiovascular complications when ESA’s were administered to attain hemoglobin levels in excess of the 12 g/dL level recommended in the ESA product labels.”

Dr Jenkins also said the FDA became aware of safety concerns about the use of ESA’s in cancer patients receiving chemotherapy between 2001 and 2003, when the agency received reports from two trials (BEST and ENHANCE) that demonstrated higher mortality and more rapid tumor growth when the ESA’s were given to maintain hemoglobin levels of greater than 12 g/dL and the findings were discussed at a May 2004 meeting of the ODAC.

He said the new safety data was added to the labeling for ESA products shortly after that meeting and that the advisory panel recommended additional data be gathered to further evaluate the new safety concerns about patients with cancer.

However, according to Dr Jenkins, it was not until late 2006 and early 2007 that the FDA was informed of several new trials in cancer patients that raised additional safety concerns.

In December 2006, the ESA makers informed the FDA of the interim results of the Danish Head and Neck Cancer Study Group trial (DAHANCA 10), a trial that compared radiation therapy alone to radiation therapy plus Aranesp in the treatment of advanced head and neck cancer.

The trial assessed whether treating anemia to achieve and maintain a hemoglobin concentration of 14.0-15.5 g/dL during radiotherapy would improve local-regional disease control.

The data monitoring committee for this trial found that 3-year local-regional control in patients treated with Aranesp was worse than for those not receiving Aranesp. Overall survival time also favored those not treated with Aranesp, he said, and the monitoring committee recommended the ESA treatment be stopped in the experimental arm on December 1, 2006.

Dr Jenkins said the FDA was notified in January 2007 of the results of a 989 patient trial of Aranesp in cancer patients with anemia who were not receiving chemotherapy when the target hemoglobin in the Aranesp treatment group was 12 g/dL.

The FDA’s analysis of the study data, he told the Committee, demonstrated that Aranesp did not significantly reduce the need for red blood cell transfusions and showed an increase in mortality in patients receiving Aranesp compared to those receiving placebo.

He said the FDA was also notified in February 2007 of the final results of a double-blind, placebo-controlled study that was designed to evaluate whether Epoetin alpha improved the quality of life for patients with non-small cell lung cancer who were not receiving chemotherapy with the dose titrated to maintain a hemoglobin level of 12 to 14 g/dL.

However, according to Dr Jenkins, this study was closed down in December 2003 after enrolling only 70 patients because its data monitoring committee found higher mortality rates in patients treated with Epoetin alfa.

Dr Jenkins informed the panel that the median time to death in patients treated with Epoetin alfa was 68 days and significantly shorter than the median time of 131 days in those treated with placebo. Also, he noted, treatment with Epoetin alfa did not significantly reduce the need for red blood cell transfusion or improve quality of life.

Dr Jenkins also explained that in 1996, the FDA approved the indication for use of ESA’s to reduce the need for blood transfusions in patients with hemoglobin values between 10 and 13 g/dL scheduled to undergo non-vascular, non-cardiac surgery.

Here, too, the approval was accompanied by a commitment to complete a post-marketing study to evaluate the risk for thrombotic events among patients who were not receiving preventive therapy with anti-thrombotic drugs.

In this case, according to Dr Jenkins, the FDA only received the results of this post-marketing study in 2007. Specifically, he said, the FDA was notified in February 2007 of the preliminary results of a trial with Procrit compared to the standard of care in patients undergoing spinal surgery.

“In this trial,” he said, “the frequency of deep venous thrombosis in patients treated with Procrit was 4.7 percent (16 patients), a rate more than twice that of patients who received usual blood conservation care (2.1 percent, seven patients).”

On June 26, 2007, Robert Vito, Regional Inspector General in Philadelphia at the US Department of Health and Human Services’ Office of Inspector General, testified at a hearing before the House Ways and Means Committee subcommittee and described cases where dialysis centers have been found to be overbilling Medicare for the anemia drugs.

He discussed a 2004 audit of payments to DaVita for ESA services provided at one Philadelphia dialysis center, which found that 44 of the 143 claims reviewed did not meet Medicare payment requirements.

In some cases, he said, they identified inconsistencies between the number of units prescribed in the physician order and the number billed to Medicare and also identified instances in which the drug was still administered to the patient after the doctor had ordered its discontinuation.

As another example, he told the committee that, in 2005, Gambro Healthcare, owner and operator of over 500 dialysis centers, agreed to pay over $350 million to resolve civil and criminal fraud allegations in the Medicare, Medicaid and TRICARE programs. To resolve its civil liability, he noted, Gambro paid $310.5 million for submitting false claims to Medicare and paying doctors improper remuneration related to their medical director services.

The new CMS reimbursement rules stipulate that cancer patients receiving chemotherapy should only use ESA’s if their hemoglobin levels fall below 10 and also limit the duration of therapy to a maximum of eight weeks after the completion of chemotherapy. They also limit the starting dose to match the FDA recommendations and limit the levels by which doses can be raised and Medicare will not cover treatment for anemic cancer patients who are not receiving chemotherapy or radiation.

The subpoena from New York Attorney General is just the tip of the iceberg when it comes to Amgen’s legal woes. The company’s failure to disclose the results of a Danish study in head and neck cancer has resulted in an inquiry by the SEC and several shareholder lawsuits.

According to the SEC filing, a class-action lawsuit was filed on May 11, 2007, in California, alleging that Amgen and its executives “made false statements that resulted in a fraudulent scheme and course of business operated as a fraud or deceit on purchasers of Amgen publicly traded securities.”

On May 14, 2007, the company was also served with a shareholder demand on the board of directors to establish a “special litigation committee” to investigate potential breaches of fiduciary duties by current or former officers and directors of the company, according to the filing.

The shareholders allege that these individuals violated core fiduciary duties, causing Amgen to suffer damages, and seek to recover damages resulting from their breach of fiduciary duties, monies and benefits improperly granted to them, insider trading proceeds and all costs associated with the inquiry by the SEC.

To increase profits, drugs used to treat anemia in patients covered by Medicare are being given at higher doses and for conditions not approved by the FDA, due to reimbursement policies adopted by the Centers for Medicare and Medicaid Services under the leadership of top officials appointed by the Big Pharma-friendly Bush Administration.

At a December 6, 2006 hearing of the House Ways and Means Committee, then chairman Bill Thomas (R-CA), told Leslie Norwalk, acting commissioner of the CMS, “we have a payment policy that perhaps is killing people; and we are using $2 billion, the highest price paid in a relatively narrow area for the use of the drug through the payment policy, that may in fact be doing that.”

Studies have shown that the massive off-label marketing of these drugs has definitely resulted in many deaths, but the question that remains is how many.

The drugs at issue include Aranesp, the brand name for darbepoetin, and Epogen and Procrit, the brand names for epoetin. Amgen manufactures all three drugs, but Ortho Biotech Products, a Johnson & Johnson subsidiary markets Procrit.

They are top money-makers for both companies. In 2006, ESA’s combined had sales of nearly $10 billion, and Aranesp and Epogen accounted for $6.63 billion, or 48% of Amgen’s total $14.3 billion revenue in 2006.

The drugs belong to a class known as Erythropoiesis Stimulating Agents (ESAs), which are man-made versions of a hormone normally produced in the kidneys to stimulate bone marrow cells to produce hemoglobin which is the main component of red blood cells.

The severity of anemia is determined by a patient’s hematocrit, the proportion of red blood cells in whole blood, which should remain at between 33% and 36%, according to the FDA. The labeling for ESAs specifies that patients should have a hemoglobin level no higher than 12 grams per deciliter of blood.

ESAs are approved only to treat anemia and reduce the need for blood transfusions in patients with chronic kidney failure undergoing dialysis, patients with cancer who are receiving chemotherapy, patients scheduled for major surgery, and HIV patients with anemia due to zidovudine therapy.

However, they are being administered off-label to kidney patients who are not receiving dialysis, cancer patients who are not undergoing chemotherapy and in doses that result in higher levels of hemoglobin than are approved by the FDA as safe and effective.

On March 9, 2007, the FDA announced that all ESAs must carry black box warnings on their labels about the increased risk for serious side effects, including death, and advised doctors that they should use the lowest dose necessary to avoid the need for blood transfusions caused by anemia.

Several recent reports have shown that dialysis centers are administering higher doses of ESAs which has resulted in an increased rate of stroke, heart attack and death in dialysis patients. The dosage received by the typical dialysis patient in the US has nearly tripled since the early 1990s, according to the November 16, 2006, New York Times.

A paper presented at the annual conference of the American Society of Nephrology[,] reported that 37% of patients at Davita clinics, the second largest provider of dialysis in the US, had hemoglobin levels higher than 14 grams at least one time in a 9-month period.

Dialysis patients in the US are dying at a higher rate due to this drugging-for-profit scheme. In Europe, where lower doses of ESAs are given, the Times reports that, about 15% of dialysis patients die each year compared to 22% in the US.

Dialysis centers are also boosting profits by administering the drugs intravenously instead of by injection. According to the Boston Globe on October 24, 2006, clinics would use 30% less ESAs, at a potential savings of $375 million each year, if ESAs were injected because the method require a lower dose and they stay in the system longer.

Critics blame the over-use on the financial incentives in Medicare reimbursement policies. Medicare covers medical care for patients with End Stage Renal Disease, and between 1998 and 2003, spending for ESRD patients increased nearly 50%. About $64,000 a year is spent for each dialysis patient, according to US Renal Data System.

Medicare guarantees dialysis centers a 6% profit for administering ESAs, and in April 2006, the CMS drew fire from Capitol Hill when it adopted a policy allowing payment for the administration of ESAs until hematocrits reached 39%.

The Ways and Means Committee chairman, Rep Thomas, sent a letter chastising Mark McClellan, the CMS Administer at the time, asking why CMS had not developed a policy to deal with the out-of-control dosing of patients at a higher levels. “I cannot understand why CMS would knowingly contradict FDA findings,” he wrote.

The CMS did not respond to the letter, so in November 2006, incoming chairman of the Committee, Rep Pete Stark (D-CA), and Rep Thomas sent a another letter to acting CMS Administrator Leslie Norwalk, describing the CMS policy as “a reimbursement incentive for providers to continue to increase doses” past the approved level.

Ms Norwalk did not respond to that letter either, but on December 6, 2006, Ms Norwalk and specific experts were called to testify at a Committee hearing due to “growing concern about unsafe and questionable treatment for Medicare’s coverage for kidney failure, also known as End Stage Renal Disease,” Rep Thomas said.

Through the current rules which endorse expanding reimbursement to allow hematocrit to be targeted to any level, Thomas said, CMS has implemented a policy harmful to its beneficiaries that will cost hundreds of millions of dollars in additional expenditures.

During the questioning of Ms Norwalk, it was revealed that the Monitoring Policy Group, created by the CMS, approved the higher hematocrit guidelines, and two-thirds of the members had financial ties to either Amgen, Johnson & Johnson or the dialysis clinics that profit by selling more of the drugs.

“Now what troubles me is that of the 24 members,” Rep Stark told Ms Norwalk, “18 of them disclosed financial associations with Amgen or Johnson & Johnson.”

It was also noted that the National Kidney Foundation guidelines had raised the hemoglobin limit to 13. However, a clue as to how that came about surfaced a few months later on March 21, 2007, when the New York Times reported that the president of the Foundation, Dr Allan Collins, was also the director of the Minneapolis-based Medical Research Foundation and in 2004, the year he was made president, Amgen underwrote more than $1.9 million worth of research and education programs led by Dr Collins, and paid him at least $25,800 in mostly consulting and speaking fees in 2005.

Dr Laura Pizzi, a professor at Jefferson Medical College, testified as lead author on a study in the November 2006, Dialysis and Transplantation journal, conducted to determine to what extent health care providers were adhering to clinical guidelines for patients receiving dialysis.

She said the study found significant overuse of the drugs, and although the researchers were not surprised to see that providers were not strictly adhering to the guidelines, they were surprised by the extent to which ESA use deviated from the recommendations.

When converting the increased use to dollar amounts based on Medicare reimbursement rates in 2005, Dr Pizzi said the population with a red blood cell count above industry guidelines had higher drug costs of $3,100 per patient each year.

“We estimate that CMS,” she told the panel, “could have reduced expenditures for these drugs by 36 percent if dialysis facilities adhered to the guidelines.”

If CMS spends $2 billion a year, she said, “it is reasonable to say that several hundred million dollars could have been saved if the providers followed the guidelines.”

Dr Noshi Ishak, a kidney specialist who owns a dialysis clinic in Laconia, NH addressed the huge profits of administering ESA’s intravenously instead of by injections.

He said he switched to administering the drugs by injection in 1998 and usage dropped by more than 20%, or equivalent “to $3,120 savings per patient per year for Medicare.”

The FDA’s Oncology Drugs Advisory Panel is scheduled to meet on May 10, 2007, to review the safety and effectiveness of ESAs, and lawmakers have ordered Amgen and J&J to cease all direct-to-consumer advertising and physician incentives until the FDA determines whether measures need to be taken to protect the public from these products.

Medicare has provided coverage for all patients with End Stage Renal Disease since 1972, and according to the House Ways and Means Committee, the government pays for 93% of services provided to dialysis patients, at a cost of about $2 billion a year.

In 2005, the drugs darbepoetin and epoetin, commonly used by patients who must undergo dialysis, accounted for almost 20% of the $13 billion spent on the Medicare Part B drug plan, and total sales for these drugs worldwide topped $9 billion.

Amgen manufactures and markets darbepoetin as Aranesp, and epoetin is sold under the names Procrit and Epogen. But Procrit is distributed by Ortho Biotech Products, a Johnson & Johnson subsidiary. There are no generic versions of these medications.

The drugs are among the top sellers for both companies. Amgen’s Epogen and Aranesp combined sales were $6.6 billion in 2006, nearly half of the company’s total revenues. Johnson and Johnson’s revenues were $3.2 billion in 2006, making it the company’s second-biggest-selling drug, according to Forbes.com on March 21, 2007.

The drugs are man-made versions of erythropoietin, a hormone normally produced in the kidneys, and belong to a class of drugs known as Erythropoiesis Stimulating Agents. ESA’s are used to treat anemia in raising hemoglobin levels by increasing the number of red blood cells in the body. Anemia’s severity is monitored by a patient’s hematocrit, the proportion of red blood cells in whole blood, which should stay between 33% and 36%.

According to the FDA, ESAs are approved to treat anemia in patients with chronic kidney failure, patients with cancer whose anemia is caused by chemotherapy, patients scheduled for major surgery to reduce potential blood transfusions, and for the treatment of anemia due to zidovudine therapy in HIV patients.

But Aranesp, Epogen, and Procrit are being administered “off label” for uses and in doses not approved by the FDA. For instance, an Amgen vice president recently estimated that about 10% to 12% of Aranesp sales are for the unapproved use of treating “anemia of cancer” in patients who are not undergoing chemotherapy.

A recent company study conducted to support FDA approval for using the drug to treat “anemia of cancer” in patients with cancer in remission who were not undergoing chemotherapy, revealed that Aranesp actually increased the risk of death in these patients.

The February 2, 2007, “Cancer Letter ,” a newsletter for cancer professionals, warns, “If the findings of the recently reported study hold up, more than one in 10 Americans getting Aranesp without chemotherapy has no chance of benefiting from the agent and could be harmed or killed by it, experts say.”

The report estimated that up to 12% of the use of ESAs in the US was for this condition.

After reviewing the results of this study and several others, on March 9, 2007, the FDA announced that black box warnings would be added to the labels for all ESAs and recommended using the lowest possible dose to raise the hemoglobin concentration to the lowest level.

The FDA-approved labeling for the drugs says patients should have a hemoglobin level of 10-12 grams per deciliter of blood, and patients are considered to need treatment if their levels fall below 10 grams.

During a press briefing, Dr Richard Pazdur, director of the FDA’s Office of Oncology Drug Products at the Center for Drug Evaluation and Research, said the black box warning was being added based on the results of several recently reported clinical trials.

Dr Karen Weiss, deputy director of the Office of Oncology Drug Products, said the FDA became concerned after receiving the results from several trials evaluating the aggressive use of ESAs to raise hemoglobin levels higher than listed on their approved labels.

In the March 10, 2007 Wall Street Journal, Dr Weiss was quoted as saying, the “bulk of the data that has raised concerns” came when patients were given higher doses, whether they were experiencing anemia from kidney disease or cancer treatment.

The evidence shows that “this type of strategy is not beneficial and, in fact, has some evidence of harm,” she said.

On March 9, 2007, the FDA also issued a public health advisory based on the results of a number of studies and warned doctors treating patients with kidney disease or cancer not to push hemoglobin levels over 12 grams per deciliter of blood.

The FDA noted a higher chance of death and an increased rate of tumor growth in cancer patients with advanced head and neck cancer receiving radiation therapy and in patients with metastatic breast cancer receiving chemotherapy, when ESAs were given to maintain levels of more than 12.There was also a higher rate of death reported, but no fewer blood transfusions, when ESAs were given to patients with cancer and anemia who were not receiving chemotherapy.

A higher chance of death and an increased number of blood clots, strokes, heart failure and heart attacks were found in patients with chronic kidney failure when ESAs were given to raise hemoglobin levels of more than 12.The Advisory warned that a higher risk of blood clots was also reported in patients who were scheduled for major surgery and received ESAs.

The FDA pointed out that ESAs are not approved for treatment of the symptoms of anemia, such as fatigue in patients with cancer, surgical patients and patients with HIV.

The drug makers have been using direct-to-consumer advertising to increase sales with cancer patients by claiming the drugs could restore energy and reduce fatigue in patients undergoing chemotherapy. But the FDA says there has never been any evidence to support claims that ESAs could increase energy or ease fatigue in patients undergoing cancer treatment.

In recent months, Congress has been investigating Medicare reimbursement policies that guarantee dialysis clinics a 6% profit for administering ESAs, since it became apparent that patients are being given higher doses than needed. Critics say any deal that allows for cost plus payments comes with a built-in incentive to provide unnecessary services.

On October 24, 2006, the Boston Globe reported that dialysis clinics are also increasing profits by administering ESAs intravenously instead of by injection, and about 95% of the patients receive the drugs intravenously.

Clinics could use 30% less, the Globe says, because when ESAs are injected they stay in the system longer and require a lower dose. A 2004 analysis found patients injected with the drugs were given 21% less, for a potential total savings of about $375 million.

The two clinic chains that dominate the dialysis industry are DaVita, with over 1,200 clinics, and Fresenius Medical Care, with about 1,500. According to the Globe, the clinics claim the intravenous method is more convenient because patients are already hooked up to IVs for dialysis.

Critics think differently. “The industry is incentivized to use intravenous because they make a profit margin on every unit they administer,” said Dr Peter Crooks, who oversees dialysis for 3,000 patients for Kaiser Permanente where most patients receive injections.

In an April 11, 2007 report, Bernstein Research estimates that dose volume in renal patients could fall as much as 25% if doctors abide by the new black box warning and insurers refuse to pay for the drugs in patients with hemoglobin levels over 12.

On November 17, 2006, the British journal Lancet reported that about half of all dialysis patients have hemoglobin levels above what the FDA considers safe, and about 20% of patients experience dangerously high levels, creating a risk for heart attack and stroke.

Concern about the incentives to overuse injectable cancer drugs, created by the Medicare reimbursement system that paid a markup of 20% to 100%, caused rates to be changed to more closely align with what doctors actually paid for the drugs, and reimbursement is now supposed to amount to only 6% more than the average price paid by all doctors.

In 2005, all totaled, cancer doctors billed about $4.4 billion for chemotherapy and anemia medications, down from $5.6 billion in 2004, and Medicare covered 80% of the bills, according to a report by Alex Berenson in the June 12, 2007, New York Times.

Since the new reimbursement rates went into effect, cancer doctors have been lobbying Medicare officials and lawmakers to raise the prices paid for drugs, and some physicians say that doctors responded to the changes by performing treatments that got them the best reimbursement, regardless of whether the treatment benefited the patients or not.

In general, oncologists make money by providing chemotherapy, even when it has little chance of success. With the new limits on profits, some doctors are performing chemotherapy more often or installing multimillion-dollar imaging machines where they profit when patients receive diagnostic scans, according to the report in the Times.

“There’s pretty good evidence at this point,” Dr Richard Deyo, professor of medicine at the University of Washington and an expert on health care spending, told the Times, “that there are plenty of patients for whom there’s little hope, who are terminally ill, whom chemotherapy is not going to help, who get chemotherapy.”

Dr Robert Geller, an oncologist in private practice from 1996 to 2005, before becoming a senior medical director at Alexion, a biotech company, told the Times that, as long as oncologists continue to be paid by the procedure instead of for spending time with patients, they will find ways to game the system, regardless of how much money they make or lose on prescribing drugs.

“People go where the money is, and you’d like to believe it’s different in medicine, but it’s really no different in medicine,” Dr Geller said. “When you start thinking of oncology as a business, then all these decisions make sense.”

Some doctors are also now requiring cancer patients to make co-payments, which can amount to hundreds of dollars a month. Medicare calls for a 20% co-pay for chemotherapy drugs, but before the reimbursement cuts in 2005, doctors often forgave the co-pays.

In the spring of 2007, reports appeared in the media about cancer doctors receiving rebates of millions of dollars if they purchased bulk supplies of anemia drugs. Doctors were purchasing the drugs directly from Amgen and Johnson & Johnson and then collecting payments from Medicare and private insurers above the price they paid.

The drugs, known as Erythropoiesis Stimulating Agents, or ESA’s, are administered in a doctor’s office. According to the FDA, ESA’s are approved to treat anemia in patients with chronic kidney failure and in patients with cancer whose anemia is caused by chemotherapy, to reduce need for blood transfusions.

On May 9, 2007, a New York Times article titled, “Doctors Reap Millions for Anemia Drugs,” by Alex Berenson and Andrew Pollack, reported that documents given to the Times showed that at one practice in the Pacific northwest, a group of 6 cancer doctors received $2.7 million from Amgen for prescribing $9 million worth of drugs in 2006.

The FDA-approved labeling for ESA’s says patients should have a hemoglobin level of 10-12 grams per deciliter of blood, and patients are considered to need treatment if their levels fall below 10. Doctors determine whether a patient is anemic and decide on ESA dosing by measuring how much hemoglobin is present in a patient’s red blood cells.

The ESA’s approved for cancer patients are made by Amgen and sell under the brand names Procrit and Aranesp. Although Amgen manufactures Procrit, the firm licenses a Johnson & Johnson subsidiary to sell it.

Len Lichtenfeld, deputy chief medical officer for the American Cancer Society, told United Press International, “Probably more than a billion dollars is spent on erythropoietin each year, which makes it one of the most expensive cancer drugs.” A six-month course of treatment per patient can cost more than $10,000.

In November 2006, the FDA issued a public health advisory on all ESA’s, based on a study in the New England Journal of Medicine, which found that patients treated with Procrit, whose hemoglobin levels were raised above the FDA-recommended level, had a higher risk of heart attack, heart failure, stroke or death.

However, in fact, Johnson & Johnson had halted several studies of Procrit in cancer patients in 2003, after they experienced a higher than expected number of blood clots, according to the January 26, 2007, New York Times.

ESA’s are not FDA approved for use with anemic cancer patients who are not undergoing chemotherapy, but doctors have been administering the drugs off-label for that condition. To increase off-label sales, the drug companies used direct-to-consumer advertising to claim that ESA’s could restore energy and reduce fatigue in chemotherapy patients.

However, the FDA says there has never been any evidence to support claims that ESA’s could increase energy or ease fatigue in patients undergoing cancer treatment.

In January 2007, Amgen itself released the results of study conducted in hopes of supporting the approval of Aranesp for use with cancer patients who were not receiving chemotherapy which found that Aranesp did not reduce the need for transfusions and showed an increase in mortality in patients receiving Aranesp by the end of 16 weeks by a statistically significant amount, compared to patients who did not receive the drug.

In March 2007, Representative, John Dingell, (D-MI) chairman of the House Committee on Energy and Commerce, sent letters to Amgen and J&J, saying that the off-label use of the drugs “appear to cause increases in blood clots, seem to grow tumors and are associated with significantly higher mortality rates than placebo,” and told the drug makers to stop all DTC advertising and physician incentives until the FDA determines whether any measures “need to be taken to protect the public from unnecessary risks to human life from these products.”

In March 2007, the FDA added black box warnings to the labels about tumor progression and a decreased survival in patients undergoing cancer treatment. On March 9, 2007, the agency issued a public health advisory to warn doctors treating patients with kidney disease or cancer not to push hemoglobin levels over 12 grams per deciliter of blood.

The FDA again warned that ESA’s were not indicated for anemic cancer patients not undergoing chemotherapy and that mortality was increased when ESA’s were used by this population. The FDA pointed out that ESA’s are not approved for treatment of the symptoms of anemia, such as fatigue in patients with cancer.

During a March 9, 2007, press briefing, Dr Karen Weiss, deputy director of the Office of Oncology Drug Products, said the FDA became concerned after receiving the results from several trials evaluating the aggressive use of ESA’s to raise hemoglobin levels higher than listed on their approved labels.

In the March 10, 2007, Wall Street Journal, Dr Weiss was quoted as saying, the “bulk of the data that has raised concerns” came when patients were given higher doses, whether they were experiencing anemia from kidney disease or cancer treatment.

The evidence is that “this type of strategy is not beneficial and in fact has some evidence of harm,” she said.

On April 10, 2007, The Wall Street Journal reported that Amgen conducted some studieswhich failed to show that the use of Aranesp improved a patient’s quality of life. On May 10, 2007, the Journal reported that J&J had “urged” doctors to enroll patients in “mini” trials using a once-a-week 40,000-unit dose of Procrit instead of three 10,000-unit doses a week.

There were $500 million a year in sales from doctors who prescribed Aranesp “off label” to treat anemia in cancer patients who were no longer receiving chemotherapy, according to the Journal.

On May 10, 2007, the FDA’s Oncology Drug Advisory Panel held a meeting and voted 15-2 in favor of new restrictions for the use of ESA’s, and 17-0 in favor of requiring the drug makers to conduct new clinical trials.

But on May 11, 2007, Bloomberg News reported that the FDA was only given limited access to results from company studies on the drugs. Amgen informed the FDA that the study data requested prior to the meeting of the advisory panel did not belong to the company and because the studies were conducted by third party researchers, Amgen did not have access to the data.

Amgen claimed that attempts were made to obtain the data and informed the FDA that the company would not be able to meet the deadline for submission to the FDA for review prior to the meeting on May 10, 2007.

FDA documents show that three years earlier, at a public meeting of the Advisory Committee on May 4, 2004, Amgen had claimed that 5 studies were being conducted to further investigate the risks of ESA’s in cancer patients, including 4 independent, third-party-sponsored clinical trials.

However, Amgen did not initiate discussions with the independent researchers to obtain the primary data for the studies until several months before the May 2007 advisory panel meeting, according to the FDA.

The FDA wanted the primary data in order to perform its own independent analysis of the results, since the studies were being used by Amgen to address safety issues that were raised by the May 2004 panel.

Concerns over the over-prescribing of ESA’s and the adverse effects on cancer patients prompted the Centers for Medicare and Medicaid Services to review Medicare coverage of their use. On May 14, 2007, CMS released its proposed coverage decision memorandum regarding the clinical conditions for Medicare reimbursement for ESA’s.

CMS found that increased thrombotic-vascular disease, tumor progression, and decreased survival occurred with ESA used to prevent or treat anemia secondary to cancer, cancer chemotherapy, or radiotherapy or to improve tissue hypoxia in an attempt to enhance tumor sensitivity to therapy.

When considering Medicare coverage of ESA’s, CMS opened the issue up for comments, and several commenters noted that it had been difficult if not impossible to obtain access to primary data from ESA clinical trials, making it difficult to conduct an independent analysis of the data.

Dr Marcia Angell, senior lecturer in Social Medicine at Harvard Medical School and former Editor in Chief of the New England Journal of Medicine, expressed concern about the lack of transparency and access of clinical trial data on ESA’s and stated in part:

“Medicare should have access to all the clinical trial information that the FDA has. Currently, companies seeking marketing approval must submit to the FDA all trials, not just the positive ones, but the agency generally does not share this information without the permission of the sponsoring company. That puts the proprietary interests of drug companies ahead of the public interest. Medicare should require full disclosure from the FDA as a condition of its support.”

Many commentators supported non-coverage for treatment of anemia in cancer patients not related to chemotherapy, stating that this was the setting in which much of the adverse outcomes were reported.

According to the CMS report, some beneficiaries with cancer stated that they had received ESA therapy continuously for years, and others stated that they continued to receive ESA’s even after their cancer was in remission.

The agency noted that there was also no evidence to support the off-label use of ESA’s in the treatment of anemia associated with radiotherapy. “The evidence reviewed and the comments received support the determination that ESA’s are not reasonable and necessary for the treatment of anemia associated only with radiotherapy,” the CMS report states.

On July 30, 2007, CMS released a final coverage determination which said that Medicare would cover the drugs for chemotherapy patients only if their hemoglobin levels were less than 10 and coverage would stop if it exceeds that level after 4 weeks of treatment.

In the Decision Memorandum, CMS determined that ESA treatment was not reasonable and necessary for conditions that include: any anemia in cancer or cancer treatment patients due to folate deficiency, B-12 deficiency, iron deficiency, hemolysis, bleeding, or bone marrow fibrosis; anemia associated with the treatment of acute and chronic myelogenous leukemias, or erythroid cancers; anemia of cancer not related to cancer treatment; patients with erythropoietin-type resistance due to neutralizing antibodies, and anemia due to cancer treatment if patients have uncontrolled hypertension.

Additionally, CMS will only provide coverage for ESA treatment for the anemia secondary to myelosuppressive anticancer chemotherapy in solid tumors, multiple myeloma, lymphoma and lymphocytic leukemia, if the hemoglobin level immediately prior to initiation or maintenance of ESA therapy is below 10.

Under the old policy, Medicare allowed doctors to get paid even if cancer patients exceeded the recommended hemoglobin levels but normally physicians only transfuse patients when the hemoglobin level approaches or drops below 8, so the use of ESA’s should begin at a level most likely to prevent the hemoglobin from dropping to 8, according to the CMS report.

CMS reiterated the FDA’s warning that ESA’s increased the risk for death and serious cardiovascular events in trials when administered to target hemoglobin greater than 12, as well as an increased risk of serious arterial and venous thromboembolic events, including myocardial infarction, stroke, congestive heart failure and hemodialysis graft occlusion.

In the midst of all the complaining about the reduced coverage rates, on August 31, 2007, Senator Charles Grassley (R-Iowa), ranking member of the Senate Committee on Finance, sent a letter to Amgen CEO Kevin Sharer requesting information on the company’s rebates to health care providers.

The letter notes that the overuse of ESA’s is not only a financial concern, but also a major patient safety concern, given that recent clinical studies have identified increased risks of death, blood clots, strokes, heart attacks and tumor growths when ESA’s are given in higher than recommended doses.

As part of the Committee’s ongoing inquiry into the impact of pricing practices on the utilization of ESA’s, the Senator asked Amgen to provide:

(1) the total, average amounts and range of rebates made to physicians, group practices, physician clinics, hospital outpatient departments, skilled nursing facilities and home health agencies which purchased Aranesp and/or Epogen for calendar years 2004, 2005 and 2006 by state; and,

(2) the number of physicians, group practices, physician clinics, hospital outpatientdepartments, skilled nursing facilities and home health agencies in each state which received rebates for Aranesp and Epogen in calendar years 2004, 2005 and 2006.

“As a preliminary response to this request,” the letter instructed, “identify the five physicians, group practices, physician clinics, hospital outpatient departments, skilled nursing facilities and home health agencies that received the highest rebate payments in each state in calendar years 2004, 2005 and 2006.”

Amgen’s latest SEC filing shows that Aranesp sales fell to $460 million for the 3rd quarter of 2007, compared to $720 million in the same period last year, and overall profits are down 82%. On October 17, 2007, Bloomberg News reported that Amgen has lost $18 billion in market value this year.

Not surprisingly, on November 13, 2007, the Wall Street Journal reported that Amgen was pouring millions of dollars into a lobbying campaign in an attempt to get Congress to change the Medicare coverage decision.

“The push,” the Journal says, “underscores Amgen’s dependence on Epogen and Aranesp, which together accounted for 48% of its revenue last year — and the fact that the federal government pays for the biggest share of Epogen.”

Amgen spent $9 million in the first half of 2007, nearly twice the amount that was spent in the previous 6 months. The company has a dozen in-house lobbyists and more than 100 external lobbyists, including former aides to Democratic House Speaker Nancy Pelosi and former Republican Senate Majority Leader Bill Frist, the Journal reports.

California Democrat Representative Pete Stark told the Journal that the integrity of Medicare decisions are at stake. If Congress overturns the new guidelines, the effect would be to tell the “industry they can spend millions of dollars and hire lobbyists all over town to push Congress to overrule sound science,” he warned.

Back on August 17, 2007, Fierce Biotech pointed out that Amgen had racked up $10.2 million in lobbying bills in 2006, “and is now second only to Pfizer in the amount of contributions it makes to federal candidates and parties.”

On November 9, 2007, Pharmalot’s Ed Silverman reported that Amgen was “funding a site called ProtectCancerPatients.org, which was devoted to overturning a recent Medicare decision to reduce reimbursement for Amgen’s big sellers, Aranesp and Epogen,” until November 9, 2007, when it disappeared.

“This website is the online headquarters of a national campaign to protect cancer patients on Medicare from a decision denying them needed medicines,” Mr Silverman quoted the site as saying.

“Our goal is to convince the Administration to reverse a recent decision which would effectively deny senior citizen cancer patients’ coverage and access to drugs prescribed by their doctors to combat anemia and reduce transfusions due to strong chemotherapy,” the site said.

According to Mr Silverman, site visitors were instructed on ways to contact their elected representatives and to write testimonials about the anemia drugs.

On November 13, 2007, the Wall Street Journal reported that J&J had launched a similar effort for its anemia-fighting drug, with a website “that allows individuals to send emails to the Center for Medicare and Medicaid Services and contact their representatives in Washington.”

The Journal noted that cancer doctors, “who benefit from Medicare’s unusually high reimbursement rate for anemia drugs, are also in Amgen’s corner.”

On that subject, it should be pointed out that the investigations by lawmakers are conspicuously missing when it comes to all the health care providers who engaged in the over-prescribing schemes for profit involving ESA’s.

The Journal reports that, unlike doctors, all patient groups are not on Amgen’s side. “I am astounded that this has been reduced to, ‘We want to protect patients,’ ” Frances Visco, president of the National Breast Cancer Coalition and a 20-year cancer survivor, told the Journal.

Ms Visco says the campaign has confused cancer patients who “feel used by this,” and she has urged Congress to reject what she calls Amgen’s “abusive” efforts. “Amgen is primarily interested in protecting Amgen,” she said in the Journal article.

All that said, the millions of dollars spent on lobbying and political contributions should not have any effect on the decision to limit coverage for ESA’s because new studies with reports of adverse effects in cancer patients using the drugs continue unabated. On November 8, 2007, the FDA announced new boxed warnings and labeling changes for ESA’s with statements about the risks that the drugs pose to patients with cancer.

In a press release, the FDA once again notes that ESA’s are approved to treat anemia caused by chemotherapy and says the new boxed warning clarifies that ESA’s should only be used when treating anemia specifically caused by chemotherapy and that ESA’s should be discontinued once the patient’s chemotherapy course has been completed.

The FDA repeats that an earlier boxed warning in March 2007 described the results of six studies demonstrating that survival was shorter and tumors progressed faster when ESA’s were used to achieve hemoglobin levels of 12 or greater in cancer patients.

For patients with cancer, the new warnings advises that ESA’s caused tumor growth and shortened survival in patients with advanced breast, head and neck, lymphoid and non-small cell lung cancer when they received a dose that attempted to achieve a hemoglobin level of 12 or greater.

The warnings also emphasize that no clinical data are available to determine whether there is a similar risk of shortened survival or increased tumor growth for patients with cancer who receive an ESA dose that attempts to achieve a level of less than 12, the hemoglobin level commonly achieved in clinical practice.

“Health care professionals need to consider the risks of increased tumor progression and decreased survival in patients with cancer when prescribing ESA’s,” said Janet Woodcock, the FDA’s deputy commissioner for scientific and medical programs, chief medical officer and acting director of its Center for Drug Evaluation and Research, in a press release.

On January 3, 2008, the FDA announced that the agency was reviewing more new data from two studies that provide further evidence of the risks of anemia drugs and show that patients with breast or advanced cervical cancers who received ESA’s to treat anemia caused by chemotherapy died sooner or had more rapid tumor growth than similar patients who did not receive the drug.

The agency notes that these studies were not among the 6 that were described in revised labeling on November 8, 2007. Taken together, all 8 studies show more rapid tumor growth or shortened survival when patients with breast, non-small cell lung, head and neck, lymphoid or cervical cancers received ESA’s, compared to patients who did not receive the treatment, according to the agency.

In its November 9, 2007, third quarter SEC filing, Amgen explains fairly clearly why the company is so worried about the Medicare coverage decision, in stating:

“The Decision Memorandum establishes the ESA reimbursement policy for Medicare and other government beneficiaries who are treated for CIA and who all together accounted for approximately 50% of the U.S. cancer patients receiving Aranesp prior to its issuance.”

Like this:

Medicare payments for dialysis cost the US government $5 billion a year. The global market for chronic dialysis services is worth approximately $43 billion and the US market is the largest in the world in terms of value.

Worldwide, by the end of 2005, the number of dialysis patients reached 1.5 million. Of that number, approximately 23% patients were treated in the US, 20 percent in Europe, 17% in Japan, and 40% in the rest of the world.

Having said all that, it will probably come as no surprise that most of the major renal care facilities in the US have come under investigation for fraud in recent years, to include Fresenius Medical Care America, DaVita Inc, Renal Care Group, Quest Diagnostics, and Bone Care International.

The 6th largest medical fraud case in US history was settled in December 2004 against Gambro Healthcare, for $325 million. At the time, Gambro was the third largest operator of renal-dialysis clinics in the US. The settlement period covered fraud that occurred from January 1, 1991, through September 30, 2004.

In fiscal 2004, the company had revenue of $3.6 billion. Gambro had revenue of $1.4 billion in the first nine months of 2005, with the latter significantly lower than 2004 due to the company selling off its US operations to DaVita in October 2005.

In December 2004, Gambro entered into an agreement to sell it’s US renal business to DeVita Inc for $3.05 billion and the FTC approved the deal in October 2005. Since the sale of its US operations, Gambro has around 11,300 employees in 40 countries.

The federal fraud investigation began in 2001, after Dr Steven Bander filed a federal whistle-blower lawsuit against the company in St. Louis, alleging fraudulent billing practices. Dr Bander is a kidney specialist and served as Gambro’s chief medical officer from 1995 to 2000, according to the lawsuit complaint.

In the end, the investigation involved the FBI, the Justice Department’s Civil Division and the Health and Human Services’ Office of Inspector General.

On December 2, 2004, the Department of Justice announced that Gambro would pay more than $350 million in criminal fines and civil penalties to settle allegations of fraud against government healthcare programs,

Gambro paid in excess of $310 million to resolve civil liabilities stemming from kickbacks paid to physicians, false statements made to procure payment for unnecessary tests and services, and payments made to the sham equipment company Gambro Supply.

Upon receiving his state’s portion of the settlement last fall, Connecticut Attorney General, Richard Blumenthal, said in a September 27, 2005 press release, “Gambro’s conduct was reprehensible. Their scams and schemes – including kickbacks, unnecessary tests and billing fraud – stole precious funds intended to care for some of society’s neediest patients.”

According to the Department of Justice, the settlement resolved allegations that Gambro Healthcare:

(1) Provided home dialysis patients equipment and supplies through a “shell” durable medical equipment company, Gambro Supply, in violation of Medicare regulations. By billing in this manner, Gambro received a higher rate of reimbursement than it would have received if it had directly submitted the claims for payment. Also, emergency home dialysis supplies were not provided as billed by Gambro;

(2) Engaged in “hard coding” of diagnostic codes on submitted claims. This practice resulted in the submission of false statements and bills being submitted for ancillary medications and services which were not medically necessary (bone density studies, nerve conduction studies, electrocardiograms, carnitor, epogen, vitamin D and iron); and

(3) Hired and compensated physicians as medical directors for their dialysis clinics based on the number and volume of anticipated patient referrals to Gambro clinics.

Gambro also violated the Anti-Kickback Act, the DOJ said, by entering into joint venture relationships with physician partners and contractual dealings “premised upon the number and volume of anticipated patient referrals.”

“Kickbacks of this type are prohibited,” according to the DOJ, “to ensure that health care providers do not make treatment decisions based upon improper financial considerations rather than the necessity, reasonableness, quality and effectiveness of services.”

As part of the overall scheme, Gambro Supply was set up as a medical equipment company, to inflate billings in a way that would allow the company to earn nearly $500 more per patient each month. The company billed for the rate charged at clinics rather than the lower rate it should have billed for home dialysis.

In addition, Gambro Supply, then known as REN Supply Corp, intentionally left a line blank on Medicare application forms in 1993 and 1996 to conceal its connection to the parent company, which made it possible to collect the extra $500 per person.

According to court records, in St Louis, Gambro Supply pled guilty to one felony count of execution of a health care fraud scheme, paid a $25 million fine and was permanently barred from the Medicare program.

This was the second time in four years that Gambro paid large fines for ripping off government programs. In 2000, the company and two subsidiaries, Dialysis Holdings Laboratory services and Gambro Healthcare Laboratory Services, paid over $53 million to settle charges of health car fraud similar to the allegations in the later investigation.

The $53 million settlement resolved charges that the firms submitted false claims to Medicare, Medicaid and Tricare, the Defense Department’s health care program, for laboratory services provided to End Stage Renal Disease patients, according to the US Department of Justice.

In a move that seems kind of silly in hindsight, as part of the 2000 settlement, Gambro entered into a 5-year integrity agreement with the Department of Health and Human Services’ Office of Inspector General. Under the agreement, reportedly designed to promote compliance with federal program requirements, Gambro agreed to provide compliance training to employees, undergo annual independent audits and submit annual reports to the Office of Inspector General.

“The corporate integrity agreement provides important safeguards to prevent misconduct and requires ongoing monitoring of the companies to help ensure compliance with federal health care program requirements,” Inspector General June Gibbs Brown said at the time.

In light of the recent $300 million plus 2004 settlement, its probably safe to assume that signing the “integrity agreement” was a meaningless gesture on the part of Gambro.

However, for whatever its worth, if anything, Gambro was required to sign another “integrity agreement” as part of the December 2004 settlement.

The charges above beg the questions of how many patients received unnecessary testing, medications and equipment, and how many patients went without services that were billed for? Also, how much out-of-pocket money did patients lose in co-payments as a result of bogus billings for services not rendered or for services rendered needlessly?

Gambro also has a long history of causing death and injury by producing faulty products. On June 19, 1998, the New York Times National News Brief reported that four “hemodialysis patients died and at least 40 others required hospitalization because of defective tubing that damaged their red blood cells.”

Gambro issued a nationwide recall of the products. A company press release at the time said the “blood tubing sets may be associated with incidents of hemolysis that have been reported in Nebraska, New Jersey, Alabama, Massachusetts, and Maryland within the past three (3) weeks.”

Hemolysis is the medical term for the destruction of the red blood cells, according to the company.

Customers who received the products were notified “to immediately cease using them, quarantine any inventory, and arrange for their return to GAMBRO Healthcare.”

“A total of four patient deaths have been reported following dialysis treatment,” the press release wrote. “Symptoms reported include abdominal pain, nausea, vomiting, cyanosis, chest pain, and flushing that occurred during and/or following dialysis treatment,” it warned.

The tubing was manufactured in Tijuana, Mexico, according United Press International, and as many as 6,000 sets of tubing may have been shipped.

In another product malfunction, on August 16, 2005, Gambro issued a “Worldwide Safety Alert” to all users of its Prisma System dialysis machine explaining what actions to take to reduce the problems with the device that resulted in excessive fluid removal.

The Prisma System is specially designed to perform the complete range of continuous renal replacement therapy for critically ill patients in the intensive care unit.

In this country, the FDA now says nine deaths and 11 serious injuries have been linked to the Prisma System. Since the device was introduced in 1997, approximately 1,900 units have been distributed to facilities in the US, and about 5,000 were sold worldwide. The system serves about 80% of the market for acute dialysis care in this country.

On January 5, 2006, Gambro Dasco, SpA, a production unit located in Italy, received a warning letter from the FDA reflecting continued concerns about the safety, adequacy and effectiveness of Gambro renal systems. The FDA also issued an import ban, calling for the detention of all Gambro’s dialysis machines shipped from Italy until the issues are resolved.

In addition to the Prisma, the ban covers the Phoenix machine, used in outpatient dialysis care, and the company’s newest product the Prismaflex machine, which is said to be an improved version of the Prisma System.

That letter arrived shortly after the FDA sent a 13-page report to Gambro following a September 2005, inspection of the company’s plant in Italy where the Prisma System is produced. The report listed numerous violations at the plant, and said more than 90 incidences of serious problems with the device, had been reported to Gambro but had not been reported to the FDA, including deaths. The report specifically noted Cambro‘s:

1. Failure to submit reports to FDA after receiving information that reasonably suggested that one of your marketed devices may have caused or contributed to a death or serious injury, as required by 21 CFR 803.50(a)(1). For example:

a) A patient died on June 6, 2004, two days after the Prisma removed 100 cc too much fluid from the patient. This event should be reported as a device-related death.

b) A facility reported that a Prisma contributed to the death of a patient on November 20, 2004, after multiple alarms for air in the blood and a blood leak. This event should be reported as a device-related death.

The report also lists more than 17 events that should have been reported under serious injuries.

Until recently, Gambro claimed user error was the sole cause of the problems with the Prisma system. However, in a letter to renal caregivers in January 2006, the company’s medical director, Juan Bosch, MD, acknowledged that software glitches might be giving users incorrect readings on fluid removal.

On February 27, 2006, the FDA sent another letter to all Renal Dialysis Caregivers, stating: “The FDA has become aware of additional serious injuries and deaths associated with the use of the Gambro Prisma® Continuous Renal Replacement Therapy (CRRT) device since the release of our preliminary Public Health Notification in August 2005.”

“We want to emphasize again that special caution must be used when operating the Prisma® System to prevent excessive fluid removal from patients,” the agency wrote.

“Caregivers must adhere strictly to the labeled operating instructions, including the Manufacturer’s Instructions for Use, Operator’s Manual, and the User Interface on the Prisma® System control panel,” it warned.

The FDA now points out that device “design issues may also be contributing to the problem, and this is currently under investigation by both the FDA and the firm.”

BREATH – The Official Blog of MADNAP – momsandmeds.com

Follow BREATH

Originally posted on The Bitter Pill:Kickstarter is a website for artists to use to raise money and complete awesome projects. The best thing to come to the informed consent movement since Thomas Szasz could just be the new, upcoming film by Dan Jenski, “ADDicted” which basically gives Ritalin, Adderall, Concerta and the like a…

Originally posted on The Bitter Pill:In the studies submitted to the FDA for approving Zoloft (a drug that has killed numerous families, babies, mothers, children), the drug maker covered up the fact that Zoloft failed to outperform placebo, according to a new consumer fraud lawsuit filed by the firms Baum, Hedlund Aristei & Goldman…

In what was more than likely originally an attempt to prove that depression causes birth complications, researchers from Yale, Tufts, et al found in two new studies that antidepressants increase the risk of preterm birth and seizures. Read more at this link on the newly redesigned UNITE website.